Happy Selling!

~Rick

It’s been a known fact for years in the new home and remodeling industry. People interested in finding a new home or remodeling ideas start by sitting down at their computer and searching online.

This search process can go on for a few months up to a few years. Every day there are hundreds of thousands of people getting ideas and gathering information. Yet, these same people aren’t picking up the phone or driving to a model home. According to Rick Storlie, they’ve been invisible, up until now.

“The invisible market started when home builders and remodelers launched their first website. It’s been this black hole of potential business. We know people are there, we’re just not sure what they’re looking for and how to capture them,” Storlie recently commented.

Storlie’s idea for this Invisible Market came from the book, “Winning in the Invisible Market,” by Robert A Potter. In the book Potter contends most service providers, like home builders and remodelers, operate on only 10% of any local market. Potter calls this the Visible Market- “people actively and opening seeking a service provider.”

“The problem with operating in the Visible Market is threefold. First, the buyer doesn’t know you. Second, you haven’t established value for your company. Third, and most importantly, there is no trust between buyer and seller,” said Storlie. “What commonly happens is a multiple bid situation where the buyer places a low price as the primary decision criteria.”

This leaves builders with slim profit margins and an unstable supply of new leads. Storlie contends most home builders and remodelers know they’re missing out, there just not sure what to do about it.

“If I look at most builder’s websites they’re all designed and built around the builder’s perspective. The problem with this is new home and remodeling buyers have much different goals. They need to get specific questions answered before they’ll consider calling or visiting a model home,” said Storlie.

Since new home and remodeling buyers shop online by process of elimination, the vast majority of home builders and remodelers are crossed off the list and never have an opportunity to tap into the Invisible Market.

“Technology is driving this revolution. Other industries are light years ahead of the housing industry and the way I look at it, the Invisible Market is a wide open opportunity for builders,” commented Storlie.

On Wednesday January 25th Storlie will be discussing the Invisible Market in detail. He’ll reveal common lead generation myths along with the specific steps builders can take to tap into the Invisible Market and profit from it.

What: Opening Your Eyes to the Invisible Market: How to Increase New Home & Remodeling Lead Opportunities by 90% (webinar)

When: Wednesday January 25th 2012 11 PST, 12 MST, 1 CST, 2 PST

Register: https://www2.gotomeeting.com/register/582417986

Cost: $0 but limited to 100 attendees

Storlie has created a sales and marketing Scorecard that will tell any home builder or remodeler how well they’re tapping into the Invisible Market. The Scorecard takes 2 minutes, builders will get an immediate score and see how they compare to their builder peers. Home builders can get their Scorecard by clicking here. Remodelers can get their Scorecard by clicking here.

In his book Winning in the Invisible Market, Robert A Potter floats this idea that 90% of your potential new leads are invisible to you. That’s right. Most builders are only tapping 10% of potential new leads.

First some definitions from the book (I’ve changed them slightly for a B2C approach):

Visible Market- The portion of the market comprised of people actively and openly seeking a builder. By the time these people enter your field of vision by taking proactive steps to hire you -request a bid, schedule a showing with a Realtor, call, email or stop by- it is likely they’re already talking to a competitor.

Invisible Market- The majority of the market, which consists of people not actively looking for a builder. Prospects in the invisible market may be at an earlier decision stage, may have already addressed a problem or may not have the motivation or resources to address the problem.

Invisible Active Market- The portion of the market where people are quietly choosing builders on a sole-source basis. The size of this market varies in different industries, but it is almost always larger than companies suspect.

Now some known facts about our industry:

• 90%+ of people start their search for a home or remodeling project online
• The sales cycle of the typical new home and remodeling prospect includes a few months to sometimes years of research
• Women are the primary decision makers when it comes to buying/building a new home or remodeling her current

Consider this chart from Marti Barletta of the TrendSight Group. According to Barletta there are 5 stages of a woman’s purchasing process.

1. Kick-off (she decides her currently home isn’t working any longer)
2. Research (she goes online)
3. Purchase (Mr. Buyer steps up to prove he’s a big shot but she still has primary influence on the decision)
4. Ownership (you build or remodel)
5. Word-of-mouth (her network of friends, co-workers and family that leads to your next referral lead)

I’ve highlighted research for a reason. This is where I’d argue is our Invisible & Invisible Active Market. It’s where she’s getting ideas on where she can build, designs available and what things cost.

When she arrives at your website it’s the equivalent of your virtual model home or showroom. If she doesn’t like what she sees, you’re done. So not only do we have to have the information she’s looking for, we have to engage her in a manner acceptable to her.

When we do this correctly, we can consistently create sales ready prospects that will choose us based on a “sole-source” basis or when they do move towards the Visible Market, we have the insider’s edge.

Ready to Find Out More?

If you think Potter is on to something and want to get more specific ideas on how this works for home builders and remodelers, secure your spot in my upcoming webinar below.

What: Opening Your Eyes to the Invisible Market: How to Increase New Home & Remodeling Lead Opportunities by 90%

Where: Webinar- your computer or tablet

When: Wednesday January 25th at 11 PST, 12 MST, 1 CST, 2 EST

Secure your spot: https://www2.gotomeeting.com/register/582417986

Cost: Free but limited to 100 people.

Happy Selling!

~Rick

“Rick, if we put as much effort into selling as we did into building we’d double our sales.”

I was intrigued and asked him to elaborate.

Here’s the story…

On Thursday December 22nd we’re revealing what we did, how we did it and the results. I’ll have both builders on the webinar with me to share their insights and results. Hope you can join us.

What: 5 Cutting-Edge Sales Strategies Revealed: How Two Builders Closed More Sales and Maximized Profits in 2011 [Webinar]

When: Thursday December 22nd at 11 PST, 12 MST, 1 CST, 2 EST

Register: https://www2.gotomeeting.com/register/276947682

Cost: Free but limited to 100 people (as of today there’s about 25 spaces still open)

Happy Selling!

~Rick

“Rick, if we put as much effort into selling as we did into building we’d double our sales.”

I was intrigued and asked him to elaborate.

“We break our building process into 5 phases,” he explained. “It’s very detailed, intelligent, automated when possible and we constantly measure our effectiveness as it relates to margins. I want to do the same thing with my sales. Here’s my idea…”

I’ve got to hand it to this guy. He’s got some great, cutting-edge ideas. Here’s his story. Enjoy.

The Background
The first thing I wanted to know was the 5 phases he uses to build his new home & remodeling projects.

“The first phase I call Foundation,” he said. “In other words, we don’t turn a shovel of dirt until I know everything about this job. The more I know before I start, the less problems I have, the client is happier at the end and my margins are higher.”

“Ok, that makes sense. What’s phase two?” I asked.

“The second phase is Framing. We’re building the infrastructure for the finishes,” he noted.

“That’s simple enough,” I commented. “What’s next?”

“Phase three is Finishes. This is where we personalize the home for our clients and their vision starts to become a reality,” he added.

I told him as a salesperson I always love this phase because this is where the buyers really fall in love with their home. “OK, what’s next?” I asked.

“Fourth is the Closing phase. It’s where we make sure every punch list item is complete or dealt with and the clients sign off on the job,” he explained. “I want to make sure this job leaves production ‘clean’ so we don’t drag unresolved issues into our warranty process.”

I told him I agreed and felt this is the most stressful time for buyer, salesperson and builder.

“What’s number five?” I asked.

“Number 5 is Analysis. After every job I review any variances from the schedule and estimate and figure out why they happened. Variances cost me money. My goal is to make sure they don’t happen again,” he said.

“That’s smart,” I told him.

“Now for the big question. What’s your idea for translating this to your sales process?” I inquired.

Here’s what he told me.

“First, we need to build a better Foundation with our prospects. We’re not connecting consistently when we first meet them and I think it’s costing us sales,” he reflected.

“Second, we’re not Framing a consistent communication stream. I want to be our prospect’s preferred source of information on new homes yet I don’t have the time or know-how to provide consistent follow-up and information,” he said.

“Third, we’re not Finishing or Personalizing our sales process. I know we need to make things more intimate for each unique prospect but I don’t know how to do it in an efficient manner,” he explained.

“Fourth, I’m a builder, not a salesperson. It seems like me and my salespeople waste too much time doing things that don’t help us Close a sale. It’s obvious people don’t buy the same today as they did a couple of years ago. We need to do things differently. I’m just not sure I know what those things are,” he said.

“Fifth, I don’t have any way of Analyzing our weak points. I can look at a P&L and variance report from a job and pinpoint our weak spots. How do I do this same thing with our marketing and sales?” he asked.

Here’s where he really threw me for a loop…

“Rick,” he said. “I want you to study our building process. We’re damn good at building and remodeling. There’s got to be a way to translate that to our sales.”

“I’d like you to build us a 5 phase sales process that mimics our building phases,” he added. “I know there’s a way to do it and I want you to figure it out.”

That was one year ago.

After a tremendous amount of blood, sweat and tears we did just that. And we brought another builder along for the ride so we could test new ideas faster.

On Thursday December 22nd we’re revealing what we did and the results. I’ll have both builders on the webinar with me to share their insights and results. Hope you can join us.

What: 5 Cutting-Edge Sales Strategies Revealed: How Two Builders Closed More Sales and Maximized Profits in 2011 [Webinar]

When: Thursday December 22nd at 11 PST, 12 MST, 1 CST, 2 EST

Register: https://www2.gotomeeting.com/register/276947682

Cost: Free but limited to 100 people

Happy Selling!

~Rick

Market positioning works like this…

• You have a homes to build or remodeling services to provide
• You need a market (people) to buy them
• If these people (your prospects) see your homes and services as “just as good” as your competition, they naturally default to differentiation through price. That is, the lowest price wins.
• You can’t sustain or grow your business by being the low price leader

The phenomenon facing our industry today is called commodification. It’s a word I learned in the book Experience Economy by B. Joseph Pine II and James H. Gilmore. Your homes and services have been commodified by the media, Realtors and buyers themselves.

And let’s face it, 90% of what you do is exactly what your competitors do- so why should a buyer pay more for your services?

That my friends is the question that floats through your prospects minds every single day. It’s the very reason why being in business for 25 years, being family owned and building quality homes does not cut it. Sure it worked fine when there were more buyers than builders. Today, not so much.

Add to it a 30%+ decline in home values, incredibly tight lending standards and a foreclosure epidemic. Why should a buyer choose your homes or pay more for design build remodeling when Chuck in a Truck will work for wages?

And don’t forget, your biggest competitor is used/lender mediated homes…

• Ask any Realtor what a buyer wants to look at first- foreclosed homes.
• Try getting a future value loan for a large remodeling project- 50%+ of the comps are foreclosures or short sales.

I was first turned on to market positioning back in 2007 when I participated in the Woman-Centric program. The Godfathers of market positioning are Jack Trout & Al Reis. They wrote a couple of books that are worthwhile reads. The 22 Immutable Laws of Marketing and Positioning- the Battle for You Mind.

Simply defined, market positioning is creating the perception in the minds of your prospects that your services/homes are unique, special and different. In other words, they can’t be compared to your competitors. You become a big fish in a small pond by appealing to a select group of people willing to pay more for your stuff.

The first step in positioning or re-positioning your business is understanding your target market (and identifying a viable target market). Basically outsmarting your competition. I wrote a book called The Ultimate System for Attracting Home Buyers that teaches you how to do just that. AND, I’m offering you a holiday savings coupon too- 20% off. That will give you free shipping plus take another $10+ off the book. Just use the coupon code gdctrial2011.

You can discover more about The Ultimate System for Attracting Home Buyers and order the book here > >

Enjoy the video.

Happy Selling!

~Rick

P.S. My 20% off Holiday Special expires on December 25th. So go ahead and buy yourself an early Christmas present here > >

Remember to use coupon code gdctrial2011 at the checkout.

Key Points:

• Never react to an offer without gathering all the pertinent information

• “Power” in a negotiation doesn’t have to be manipulative. Each side has power and it can be used cooperatively towards a win/win agreement.

• Getting loud or abrasive naturally triggers resistance in the other person. This weakens the relationship and typically ends the negotiation without an agreement. Good negotiators are aware of this and won’t let their emotions get in the way of a deal

• Establish trust before negotiating. This means meeting face-to-face and confirming commonalities

• When applicable, compliment your adversary and be positive

• Tip for home builders: Don’t allow real estate agents to fax or email you an offer. Always meet them face-to-face to present the offer and ask that their clients attend too (most will decline their clients attend but insist they pass the invitation on). Meeting face-to-face will build trust prior to the negotiation and allow you to gather needed information for the best counter offer.

and most importantly…Have a written negotiation plan (this is John’s Negotiation Power Analysis form)

With a written plan you analyze the 12 elements of each negotiation and don’t let emotions dictate your strategy. Understanding how these 12 elements work together is the key to leveling the field and neutralizing your buyer’s market power (their advantage when supply is greater than demand).

Watch the webinar and download the Power Analysis form here > >

Happy Selling!

~Rick

On Wednesday November 23rd Rick Storlie of New Home Sales Coach will be interviewing John Wenner of the Real Estate Negotiation Institute on how home builders and remodelers can better negotiate with their buyers.

Last May Rick Storlie happened to receive an email about a 2 day negotiation course. It came at the same time he needed to complete his annual continuing education credits so Storlie signed up for the course.

Looking back over his 20+ year career in new home and remodeling sales he realized that after hundreds of classroom hours in marketing strategies and sales techniques, he had never been formally trained in negotiation.

“I had this light bulb moment and suddenly realized that here we were negotiating multi-thousand dollar deals on a daily basis without any formal negotiation training, ” Storlie commented. “Today’s buyers have a built-in edge. They have market power. They understand the market is tipped in their favor and they use this power when they negotiate with home builders and remodelers.”

In the course Storlie learned there are 3 types of negotiators. Competitive, Collaborative and Compliant.

“Because market power gives buyers a built-in advantage, most of today’s buyers become Competitive negotiators. They propose a win-lose offer. That is, they win and the builder loses,” Storlie said.

Storlie claims a buyer’s market power turns unskilled builder negotiators into Compliant sellers (lose-win).

“If a remodeler or home builder isn’t trained in negotiation they lose thousands of dollars in profit by being compliant to the buyer’s demands. This is a lose-win situation and at its worst, will put companies out of business,” said Storlie. 

According to Storlie the key is to create a Collaborative situation where a win-win negotiation is created. Each side works together to get what they want. 

After the course ended Storlie approached John Wenner of the Real Estate Negotiation Institute and asked him if he would share his negotiation expertise. Wenner agreed and on Wednesday November 23rd Storlie and Wenner will offer a free webinar specifically for home builders and remodelers.

The details for registering are below.

12 Elements to Leveling the Negotiation Playing Field with Today’s New Home and Remodeling Buyers

Wednesday November 23rd 11 PST, 12 MST, 1 CST, 2 PST

Register here https://www2.gotomeeting.com/register/933379858

Cost: $0 but limited to 100 attendees

About Rick Storlie: Rick Storlie of New Home Sales Coach has been helping home builders and remodelers reach their sales goals since 1992. Visit NHSalesCoach.com to download Rick’s free e-book “6 Secrets to Maximizing Your Sales in any Market Revealed.” Storlie can be reached at 952-895-5566 or Solutions@NHSalesCoach.com.

I’ve been to TONS of seminars and paid anywhere from $0 to thousands of dollars and this was one ranked with the best. While at the seminar something dawned on me…

We work in a market with a built-in disadvantage (i.e. more sellers than buyers) and very few of us, including me, have formally studied negotiation.

Let’s face it, as a home builder and remodeler today, you’ve got an uphill battle when it comes to negotiating with buyers. Every buyer out there thinks they have you over a barrel and can squeeze every bit of profit out of you.

Their negotiating power is called Market Power. It gives every buyer a built-in edge.

If you don’t understand how this power works, it can lead to…

• Lost sales
• Lower Margins
• And what’s happened to many of your competitors- you shut the doors

The good news is you’re reading this and still have an opportunity to discover how these 12 elements of negotiation power work.

On Wednesday November 23rd John Wenner (the same guy that taught my course), a master negotiator with 25 years of professional negotiation experience, from the Real Estate Negotiation Institute will show you how these 12 elements of negotiation power work.

Every home builder and remodeler that understands them can use them to…

• Generate the best outcome in every transaction
• Level the playing field
• Lessen the impact of a buyer’s market power
• Sell more at higher margins

 Click here to secure your spot https://www2.gotomeeting.com/register/933379858

There is no cost to attend and everyone that does will receive John’s Negotiation Power download. Register today!

We’ll, the times they are a changin’…

At our October 20th webinar Four Cutting Edge Lead Generation Ideas for Today’s Home Builders and Remodelers, I revealed the results to date with our case study of Hallmark Homes and NIH Homes. Check them out.

The results are pretty telling, aren’t they? Unqualified walk-in traffic is 70% of our total leads yet nets only 30% of our sales. On the flip side, Realtor showings and referral leads are only 13% of our total leads yet generate a combined 55% of total sales.

Now imagine this. Using the “MoneyBall” approach to your annual marketing and sales plan, how many leads of each source would you need to do the following?

If we use the same ratios and formulas as our case study builders, this is what you would need…

Here’s the conclusions so far: